*97031701.NNE
TEXT: CLINTON MARCH 14 LETTER TO CONGRESS, IRAN EMERGENCY
(Iran presents threat to peace and security of all nations) (1860)
Washington -- Iran continues to "engage in activities that represent a
threat to the peace and security of all nations, including its
continuing support for international terrorism, its support for acts
that undermine the Middle East peace process, and its intensified
efforts to acquire weapons of mass destruction," President Clinton
said March 14.
In his report to Congress on developments concerning the national
emergency with respect to Iran that was declared in Executive Order
12957 of March 15, 1995, the president said the actions and policies
of the Government of Iran present "an extraordinary and unusual threat
to the national security, foreign policy, and economy of the United
States."
Violations of the comprehensive trade embargo against Iran, which
prohibits virtually all trade with Iran except information and
informational materials and certain other limited exceptions, continue
and are being "aggressively pursued," he said.
"I shall exercise the powers at my disposal to deal with these
problems and will report periodically to the Congress on significant
developments," Clinton stated.
Following is the text of the president's letter:
(Begin text)
TO THE CONGRESS OF THE UNITED STATES:
I hereby report to the Congress on developments concerning the
national emergency with respect to Iran that was declared in Executive
Order 12957 of March 15, 1995, and matters relating to the measures in
that order and in Executive Order 12959 of May 6, 1995. This report is
submitted pursuant to section 204(c) of the International Emergency
Economic Powers Act, 50 U.S.C. 1703(c) (IEEPA), section 401(c) of the
National Emergencies Act, 50 U.S.C. 1641(c), and section 505(c) of the
International Security and Development Cooperation Act of 1985, 22
U.S.C. 2349aa-9(c). This report discusses only matters concerning the
national emergency with respect to Iran that was declared in Executive
Order 12957 and does not deal with those relating to the emergency
declared on November 14, 1979, in connection with the hostage crisis.
1. On March 15, 1995, I issued Executive Order 12957 (60 Fed. Reg.
14615, March 17, 1995) to declare a national emergency with respect to
Iran pursuant to IEEPA, and to prohibit the financing, management, or
supervision by United States persons of the development of Iranian
petroleum resources. This action was in response to actions and
policies of the Government of Iran, including support for
international terrorism, efforts to undermine the Middle East peace
process, and the acquisition of weapons of mass destruction and the
means to deliver them. A copy of the order was provided to the Speaker
of the House and the President of the Senate by letter dated March 15,
1995.
Following the imposition of these restrictions with regard to the
development of Iranian petroleum resources, Iran continued to engage
in activities that represent a threat to the peace and security of all
nations, including Iran's continuing support for international
terrorism, its support for acts that undermine the Middle East peace
process, and its intensified efforts to acquire weapons of mass
destruction. On May 6, 1995, I issued Executive Order 12959 to further
respond to the Iranian threat to the national security, foreign
policy, and economy of the United States.
Executive Order 12959 (60 Fed. Reg. 24757, May 9, 1995) (1) prohibits
exportation from the United States to Iran or to the Government of
Iran of goods, technology, or services; (2) prohibits the
reexportation of certain U.S. goods and technology to Iran from third
countries; (3) prohibits dealings by United States persons in goods
and services of Iranian origin or owned or controlled by the
Government of Iran; (4) prohibits new investments by United States
persons in Iran or in property owned or controlled by the Government
of Iran; (5) prohibits U.S. companies and other United States persons
from approving, facilitating, or financing performance by a foreign
subsidiary or other entity owned or controlled by a United States
person of certain reexport, investment, and trade transactions that a
United States person is prohibited from performing; (6) continues the
1987 prohibition on the importation into the United States of goods
and services of Iranian origin; (7) prohibits any transaction by a
United States person or within the United States that evades or avoids
or attempts to violate any prohibition of the order; and (8) allowed
U.S. companies a 30-day period in which to perform trade transactions
pursuant to contracts predating the Executive order.
At the time of signing Executive Order 12959, I directed the Secretary
of the Treasury to authorize through specific licensing certain
transactions, including transactions by United States persons related
to the Iran-United States Claims Tribunal in The Hague, established
pursuant to the Algiers Accords, and related to other international
obligations and United States Government functions, and transactions
related to the export of agricultural commodities pursuant to
preexisting contracts consistent with section 5712(c) of title 7,
United States Code. I also directed the Secretary of the Treasury, in
consultation with the Secretary of State, to consider authorizing
United States persons through specific licensing to participate in
market-based swaps of crude oil from the Caspian Sea area for Iranian
crude oil in support of energy projects in Azerbaijan, Kazakstan, and
Turkmenistan.
Executive Order 12959 revoked sections 1 and 2 of Executive Order
12613 of October 29, 1987, and sections 1 and 2 of Executive Order
12957 of March 15, 1995, to the extent they are inconsistent with it.
A copy of Executive Order 12959 was transmitted to the Speaker of the
House of Representatives and the President of the Senate by letter
dated May 6, 1995.
2. On March 5, 1997, I renewed for another year the national emergency
with respect to Iran pursuant to IEEPA. This renewal extended the
authority for the current comprehensive trade embargo against Iran in
effect since May 1995. Under these sanctions, virtually all trade with
Iran is prohibited except for information and informational materials
and certain other limited exceptions.
3. The Iranian Transactions Regulations (the "Regulations" or ITR), 31
CFR Part 560, were amended on October 21, 1996 (61 Fed. Reg. 54936,
October 23, 1996), to implement section 4 of the Federal Civil
Penalties Inflation Adjustment Act of 1990, as amended by the Debt
Collection Improvement Act of 1996, by adjusting for inflation the
amount of the civil monetary penalties that may be assessed under the
Regulations. The amendment increases the maximum civil monetary
penalty provided in the Regulations from $10,000 to $11,000 per
violation.
The amended Regulations also reflect an amendment to 18 U.S.C. 1001
contained in section 330016(1)(L) of Public Law 103-322, September 13,
1994; 108 Stat. 2147. The amendment notes the availability of higher
criminal fines pursuant to the formulas set forth in 18 U.S.C. 3571. A
copy of the amendment is attached.
Section 560.603 of the ITR was amended on November 15, 1996 (61 Fed.
Reg. 58480), to clarify rules relating to reporting requirements
imposed on United States persons with foreign affiliations. Initial
reporting under the amended Regulation has been deferred until May 30,
1997, by a January 14, 1997, Federal Register notice (62 Fed. Reg.
1832). Copies of the amendment and the notice are attached.
4. During the current 6-month period, the Department of the Treasury's
Office of Foreign Assets Control (OFAC) made numerous decisions with
respect to applications for licenses to engage in transactions under
the ITR, and issued 13 licenses. The majority of denials were in
response to requests to authorize commercial exports to Iran --
particularly of machinery and equipment for the petroleum and
manufacturing industries -- and the importation of Iranian-origin
goods. The licenses issued authorized the export and reexport of
goods, services, and technology essential to ensure the safety of
civil aviation and safe operation of certain commercial passenger
aircraft in Iran; certain financial and legal transactions; the
importation of Iranian-origin artwork for public exhibition; and
certain diplomatic transactions. Pursuant to sections 3 and 4 of
Executive Order 12959 and in order to comply with the Iran-Iraq Arms
Non-Proliferation Act of 1992 and other statutory restrictions
applicable to certain goods and technology, including those involved
in the air-safety cases, the Department of the Treasury continues to
consult with the Departments of State and Commerce on these matters.
The U.S. financial community continues to interdict transactions
associated with Iran and to consult with OFAC about their appropriate
handling. Many of these inquiries have resulted in investigations into
the activities of U.S. parties and, where appropriate, the initiation
of enforcement action.
5. The U.S. Customs Service has continued to effect numerous seizures
of Iranian-origin merchandise, primarily carpets, for violation of the
import prohibitions of the ITR. Various enforcement actions carried
over from previous reporting periods are continuing and new reports of
violations are being aggressively pursued. Since my last report, OFAC
has collected a civil monetary penalty in the amount of $5,000. The
violation underlying this collection involves the unlicensed import of
Iranian-origin goods for transshipment to a third country aboard a
U.S.-flag vessel. Civil penalty action or review is pending against 21
companies, financial institutions, and individuals for possible
violations of the Regulations.
6. The expenses incurred by the Federal Government in the 6-month
period from September 15, 1996, through March 14, 1997, that are
directly attributable to the exercise of powers and authorities
conferred by the declaration of a national emergency with respect to
Iran are approximately $800,000, most of which represent wage and
salary costs for Federal personnel. Personnel costs were largely
centered in the Department of the Treasury (particularly in the Office
of Foreign Assets Control, the U.S. Customs Service, the Office of the
Under Secretary for Enforcement, and the Office of the General
Counsel), the Department of State (particularly the Bureau of Economic
and Business Affairs, the Bureau of Near Eastern Affairs, the Bureau
of Intelligence and Research, and the Office of the Legal Adviser),
and the Department of Commerce (the Bureau of Export Administration
and the General Counsel's Office).
7. The situation reviewed above continues to involve important
diplomatic, financial, and legal interests of the United States and
its nationals and presents an extraordinary and unusual threat to the
national security, foreign policy, and economy of the United States.
The declaration of the national emergency with respect to Iran
contained in Executive Order 12957 and the comprehensive economic
sanctions imposed by Executive Order 12959 underscore the United
States Government opposition to the actions and policies of the
Government of Iran, particularly its support of international
terrorism and its efforts to acquire weapons of mass destruction and
the means to deliver them. The Iranian Transactions Regulations issued
pursuant to Executive Orders 12957 and 12959 continue to advance
important objectives in promoting the nonproliferation and
antiterrorism policies of the United States. I shall exercise the
powers at my disposal to deal with these problems and will report
periodically to the Congress on significant developments.
(end text)
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